Why is it said that MPC+AA is the only way for Mass Adoption of 1 billion encrypted wallet users?

Author: Kevin He, Sinohope

MPC and AA dispute review summary

Recently, Ethereum founder Vitalik's negative comments on the MPC-based EOA wallet once again sparked a big discussion on the technical route of the Crypto wallet.

The cause of the incident was that Vitalik pointed out that the MPC EOA wallet has a fundamental defect of "unable to revoke the key" when replying to the question of the netizen AMA about the MPC wallet. The original text is as follows:

Vitalik Twitter screenshot

One stone stirred up thousands of waves, and this Twitter sparked many discussions, and the participants included core members of well-known teams such as coinbase/zengo/slowmist. The Chinese community also set off a wave of "Rectifying the Name of MPC" movement, and several MPC wallet teams published signed essays in response to Vitalik's remarks. For a while, the Crypto community, which had been silent for a long time due to the sluggish market conditions, blew a long-lost technical breeze again.

For the principle and comparison of MPC and AA (Account Abstraction abbreviation, Ethereum’s latest plan for the development of smart contract wallets), this article will not go into details. If you are interested, you can refer to the article Seedless‍Self-Custody: On MPC and Smart Contract Wallets for understanding : The core advantage of MPC is to solve the single-point problem of private keys, and the core advantage of AA is that everything can be programmed.

Looking at the viewpoints of this discussion, the following conclusions are made:

1. The Ethereum core community represented by Vitalik has always only considered the development direction, planned the community route, and formulated technical solutions from the perspective of complete decentralization and the entire chain. It is understandable to make such an evaluation of the MPC wallet;

2. Although the MPC key cannot be revoked "cryptographically", this does not affect the security construction and large-scale application of the MPC wallet;

3. Small composition in the community, some did not understand the intention that Vitalik wanted to express, and some were deliberately avoiding the presuppositions such as decentralization implied by Vitalik;

4. It is gratifying to see that some teams are working hard to promote the integration of MPC and AA with a more open mind, rather than simply a dispute over technical concepts;

5. There are many people who are keen to discuss technology, but few people really care about user needs.

Throughout the discussion, the technical part has been relatively in place, and each team has fully expressed its own point of view. However, the biggest regret is the lack of thinking and analysis of the essential needs of users in the discussion. I humbly believe that technology is the means, and meeting and exceeding user needs is the goal. Solving more user problems and talking less about technical concepts and doctrines is the premise and basis for large-scale applications.

This article intends to make up for the above regrets, focusing on the real needs of users: scenarios/pain points/solutions/values, etc., hoping to provide some new perspectives and new thinking for this discussion.

Wallet users just need

The author believes that the development of the Crypto industry in the next ten years must achieve Mass Adoption and provide services for 1 billion-scale users.

Based on this vision, we have to solve two core issues: 1) where do users come from and 2) where do funds come from.

The next wave of potential large-scale users are definitely not technical geeks/generally unable to understand symmetric and asymmetric encryption technology/probably unable to properly keep their mnemonic words.

The next wave of potential large-scale assets is likely to come from the asset mapping in the existing financial system, which must involve enterprise users, and their scenarios and demands are very different from ordinary users.

The following lists two categories of user wishes and their needs/pain points in high-frequency scenarios:

There is a broad consensus in the Crypto industry: Not your keys, not your coins. It can be deduced from this sentence: decentralized hosting is important.

In fact, this kind of inference does not consider the usage scenarios and implementation difficulties of real users. It is essentially empty talk about decentralization. A16z crypto's column Wallet Security: The 'Non-Custodial' Fallacy starts from the key generation/storage/use life cycle Let's analyze and explain that managed and unmanaged are not black and white.

To sum up, according to the summary of our team, the core needs of users can be summarized as the following triangle relationship:

This is almost an impossible triangle. Only by deeply combining user scenarios and core needs to make trade-offs can we achieve both in products.

How to meet the above requirements?

Combined with the above description of user wishes and demands, the deep-seated needs of users can be summarized in two sentences:

What users want is asset security, but every user cannot be required to have full-stack security knowledge and skills.

What users want is asset control, not the need to personally control all aspects of the entire product technology.

The author has been engaged in the Crypto industry for many years, and is also a senior user of new energy vehicles; the author believes that there are certain similarities between the current Crypto wallet industry and the new energy vehicle industry. In order to help readers understand, the following table makes some comparisons between the two industries. Just for fun.

The needs of users are right in front of us, and the development of the industry must follow its objective laws. As entrepreneurs, how can we solve this problem and provide products that meet or even exceed user expectations?

We believe that in the current and next few years, the MPC wallet solution based on MPC-TSS + TEE trusted computing technology, in terms of security, multi-chain versatility, cost of use, privacy, scalability, etc. Both have obvious advantages and are the best PMF (Product Market Fit).

It can be compared to the widely acclaimed range-extending electric technology products in China's new energy market, such as the ideal car L series.

We believe that the MPC wallet based on the above technology can satisfy the approximate impossible triangle mentioned above:

At the same time, since the AA wallet needs one or more EOA addresses as controllers, the private key single point problem of EOA addresses can be well solved by MPC technology. Therefore, we believe that MPC + AA is the ultimate solution.

About Sinohope

Sinohope (an MPC self-custodial platform under Xinhuo Technology Holdings Co., Ltd. High-performance blockchain technology platform. The team is committed to creating a new generation of safe and compliant self-custodial platform, allowing users to fully control and restore private keys with a Web2 experience, and fully guarantee the security of underlying assets while reducing user operating thresholds.

In the past six months, Sinohope has signed contracts with more than 100 B-end customers, and the cooperation directions are as follows:

1. Exchange platform, which can be connected to Sinohope's OpenLoop network to increase the transaction volume of institutional customers. Currently, Sinohope's contracted customer funds exceed US$5 billion;

2. Market makers and trading funds can map assets for trading without recharging funds to the centralized trading platform;

3. All kinds of off-site and bulk merchants;

4. The company holds digital assets and requires a multi-signature process;

5. The project party or fund needs enterprise-level internal collaboration, approval, fiscal and taxation systems, etc.

The technical panorama of Sinohope products is as follows, industry partners are welcome to download and try and give valuable opinions:

Write at the end

This article reviews the so-called MPC and AA technology battle. The author analyzed user needs and usage scenarios, combined with user wishes and industry development direction, and saw that the MPC wallet based on MPC-TSS + TEE trusted computing technology is the best choice to match the market at present and in a long period of time in the future , and led the team to build a Tier1-level Sinohope MPC self-hosted product. At the same time, the author believes that MPC and AA are not opposed, but can be integrated and promoted each other.

The author believes that the rapid and large-scale adoption of MPC wallets and its derivative services (such as WaaS) will help solve the chronic illness that has plagued the industry for many years-the single point of failure caused by the loss of private keys, and will help solve the next development of the industry The two core issues of Inspur: users and sources of funds will help popularize blockchain technology to 1 billion users.

Most of the opinions in this article come from the author’s colleagues and peers. Sinohope products are also built on the excellent work of a group of pioneers in the field of Crypto and MPC technology, and I would like to thank them here.

Due to the limited knowledge of the author, there may be many mistakes in the article, readers are welcome to enlighten me.